Oligopoly and efficiency EFFICIENCY WITHIN OLIGOPOLIES It is hard to determine, in theory, whether oligopoly industries will—or will not—be efficient. This is something that can only be determined by investigating individual oligopoly industries. Some oligopoly industries are found to be efficient; other oligopoly industries are found to be inefficient. Some oligopoly firms earn relatively high profits. They have, then, the resources needed to achieve production efficiency and dynamic efficiency.
Can you explain the differences and what they might be due to? The average performance of DFA 9-10 fund excess crsp 9-10 index, but slightly lower than s&p500 index. It means the portfolio is diversified to eliminate unsystematic risk, but tracking error is also exist.The reason of the tiny difference may be timing or security selection. Can you explain the differences and what they might be due to? The average performance of DFA large company value fund has very small difference with crsp cap decile #1.
Another problem is that there is no growth in your field if you work at Wal-Mart. It does not have a union, meaning its workers are not protected and don’t receive benefits. According to “What’s Good for Wal-Mart” by John Miller Wal-Mart on average pays its employees 12.4% less than other grocery stores and retail stores. Being the second largest job supplier in America I believe it should pay its employees more money. Wal-Mart is also starting eliminating the small
Computed by deducting the cost of capital from the after-tax profit, it is said to be the best measure of the true profitability of an enterprise because it is tied to cash flow and not earnings per share. Many analysts would agree that EVA is more positively associated with a company’s stock price than ROE or EPS. Keith confirmed his findings with an industry analyst, which posed him with the decision of whether of not to implement this calculation into OSI accounting practices. Furthermore, would it be a beneficial tool to be used for evaluating the new manager’s incentive compensation plans? The EVA trend seems to be almost mandatory for the larger companies, but there is no reason that it shouldn’t work just as well for their smaller firm.
This would also help improve the company’s inventory turnover ratio from 4.7 to the industry average of 6.1. The firm’s debt ratio anticipation of 44.17% is better than the market average and will allow the company to pay down its debt quicker than competitors and have more cash on hand. The extra cash on hand provides more liquidity and is attractive to potential investors. However, these numbers are based on high projections. If such numbers are not reached the company is considered underperforming and makes an unattractive appeal to investors.
From an accounting prospective, the major problem with the calculations mentioned in the article is determining the rate of return and length of the marketing investment. While the initial value of the “investment”, i.e. marketing expense, can be easily determined, determining the real value after the investment has been made has the potential to be biased without a commonly used measurement. The value of the investment could also fluctuate from year to year based on the companies’ profitability even though marketing had not direct
Profit maximisation occurs when a firm produces at the point where marginal cost equal marginal revenue (MC=MR). This is the point of profit maximisation as any unit produced after this point will have a greater marginal cost than marginal revenue therefore the marginal revenue being gained from the extra unit will decrease total revenue rather than increase it, thus causing profits to decrease. A reason why a firm may want to profit maximise is that it keeps shareholder happy as they receive a greater share of dividends and also if a firm has profits they can reinvest these profits into research and development (dynamic efficiency). There are many different objectives a firm could have other than profit maximisation. The knowledge of a firm finding out where marginal costs equal marginal revenue is very difficult so some firms may not be able to profit maximise as they do not have the correct knowledge required to do so.
Are share repurchases good or bad? The answer, as might be expected, is a bit gray. Assuming the company has a certain amount of cash they wish to return to shareholders, the two ways they can do it are through dividends and share repurchases. Share repurchases are typically more flexible for the company, while dividends are more flexible for the shareholder. The basic answer is that share repurchases are great when the share price is undervalued, and not-so-great when the share price is overvalued.
Hypothesize the basic short-run and long-run behaviors of the model in the industry you have chosen in a “market economy.” Some short-run behaviors include not too much demand because of the launch of new products leading to not as many sales. Another short term behavior can be if a popular item is launched, then it will be sold out in a couple of days because of its popularity. The opposite can be said for long-term behaviors. If something is not in demand, then the product can sit in stands for a long period of time and the company would incur a loss in that product. Another long run behavior is the value of high valued items.
Assume that the deal finalizes in 3 months time and a risk—free interest rate of 5.5%. Show that the implicit probability of deal success is approximately 60%. Using the 60% from part b. ), estimate the expected synergies of the deal. Based on this estimate, should Vodafone shareholders support the deal?